Should You Invest in Cypress, TX Real Estate?

From location to housing demand, there are many reasons to acquire homes for sale in Cypress, TX. If you’re still on the fence about real estate investing in Cypress, here’s what you need to know about the local housing market. 

An Overview of Cypress, TX Real Estate

Cypress is an affluent enclave located about 24 miles northwest of Houston. It is part of the Cypress-Fairbanks (Cy-Fair) area along with Jersey Village. The area spans 186 square miles in Northwest Houston and is highly coveted for its location, setting, and quality homes.

The housing market is relatively competitive for these reasons – most homes in the area receiving two offers on average and selling within 31.5 days of going on the market, according to Redfin. The median sale price was $365,000 in May 2023, up 1.4% from the previous year.

Trends Influencing the Market

The Cy-Fair real estate market is shaped by a number of planned residential and commercial developments and infrastructure projects to accommodate a rapidly growing population. In April 2022, a Population and Survey Analysts (PASA) report stated that an estimated 38,000 new housing units will be added to the Cy-Fair ISD jurisdiction between 2021 and 2031. 

Hundreds of new homes are expected to rise in Cy-Fair in 2023 alone. These include single-family and multifamily units. These homes will help augment the 43,788 housing units that were added to the Cy-Fair housing stock in the last decade, based on data from the U.S. Census Bureau’s American Community Survey. 

The construction of new homes will help address the demand for housing in Cypress and the surrounding areas. It also presents fresh opportunities for real estate investors in search of suitable properties in the Cypress market. There will be additional housing units to choose from in the coming decade. 

PASA predicts that Cypress will become the center of the Houston Metro Area within the next two decades. Several master-planned communities south of Highway (Hwy) 290 are expected to each add 1,000 or more housing units from 2021 to 2031. 

Demand for Single-Family and Multi-Family Rentals

While construction and development continues, higher home prices and mortgage rates will cause buyers to seek alternatives to home purchases. This will drive the demand for multifamily and single-family rentals in the area.

PASA predicts that multifamily growth will outpace single-family growth between 2026 and 2031 as apartment complexes and build-to-rent neighborhoods rise on the remaining tracts of buildable land. The institute estimates that 55% of new housing units to be constructed in 2026-31 will be multifamily.

Factors to Consider When Buying Homes for Sale in Cypress, TX

There are several factors to consider when deciding whether a real estate investment is right for you: 

  1. Location – This continues to be the single most important factor for profitability in real estate investing. When choosing an investment property, look at its proximity to schools, freeways, parks, stores, and other amenities.

Another way to evaluate a property’s location is to adapt a mid-to-long-term view of major developments in the area over the planned investment period and whether these changes will be favorable for you. Looking into the intended usage of the areas surrounding the property will also help you make a decision.

  1. Valuation – Property valuation is essential to financing your acquisition. It also affects the property’s listing price, insurance, and tax rates. Look at recent comparable sales in the area to come up with an estimate of property value. You can also use the cost approach, in which you take the cost of the land and construction and deduct depreciation, and the income approach, which helps you calculate the value of rental property based on expected cash inflow.
  1. Expected cash flow – Cash flow refers to the amount of money left after deducting the expenses of property ownership and management. An investment property with positive cash flow typically has a good return on an investment (ROI).
  1. Investment strategy and timeframe – It’s important to be clear about your purpose and intentions for real estate investing. Before acquiring property, determine your goals and choose the best strategy for your investment. These strategies may include: 
  • Buy and self-use – Utilize the property while getting value appreciation.
  • Buy and lease – Generate passive income and long-term value appreciation.
  • Buy and sell (in the short-term) – Generate small to medium profit, fast.
  • Buy and sell (in the long-term) – Focus on significant intrinsic value appreciation over a long period.

Consult with a Real Estate Expert

Locate your next investment in Cypress, TX with the help of a local expert. A real estate professional will help you choose a property with strong potential for income or appreciation depending on your goals. They will provide access to listings and walk you through the buying process.

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